Foreclosures, foreclosures, foreclosures. There are currently 6,847 bank owned properties within North Carolina and 1,137 bank owned properties within Mecklenburg county, 150 within Cabarrus county, 234 within Union county, 169 within Gaston county and 158 within Iredell county with an estimated 575,716 bank owned properties nationwide according to Foreclosure.com. Will modifying the bankruptcy law help to curb foreclosures. Some members of Congress believe so.
Democrats and housing advocates have been pushing for legislation that will give bankruptcy judges more power to modify primary home mortgages for the past two years. They are being met by strong opposition posed by many Republicans. The House of Representatives is expected to pass legislation.
Currently, filing bankruptcy often results in a higher mortgage payment due to missed payments and penalization fees being added on to the principle. Borrowers would then be responsible for a larger payment under a bankruptcy repayment plan.
Changing the legislation would force borrowers to seek a voluntary loan modification before going to bankruptcy court.
The Mortgage Bankers Association disagrees with the new proposed legislation. "That's exactly what we need, the cost of financing homes to go up, in the economy we have right now," said David G. Kittle, chairman of the Mortgage Bankers Association, noting that the risk of bankruptcy court revisions is what makes the interest rates on second-home mortgages and even credit cards higher than primary residence mortgages.
The Congressional Budget Office estimated that more than one million households would benefit financially by filing for bankruptcy protection if the legislation is approved. But based on studies of how many people who could benefit from such protection actually file for bankruptcy, the office estimated that the change would lead to 350,000 additional cases over the next decade -- with two-thirds coming by 2012.